All the Elite Hypocrisy Revealed by the Paradise Papers So Far
People who claim to want to eradicate poverty in "helping to perpetuate it" shocker.
This article originally appeared on VICE UK.
There are a number of reasons why you might want to put your money in an offshore fund, but chief among them has to be the offer of secrecy. After all, who wants other people getting all up in their financial affairs? It must be more than slightly annoying when the inner workings of the world's leading offshore law firms keep getting leaked to the world's media.
The latest leak goes by the name of the Paradise Papers—a reference to the idyllic nature of the world's most tax efficient jurisdictions. More than 13 million files from two offshore service providers and the company registries of 19 tax havens were obtained by German newspaper Süddeutsche Zeitung, shared with the International Consortium of Investigative Journalists and scrutinized by news outlets including the BBC and the Guardian.
The findings shine a light on the financial affairs of some of the world's biggest businesses and most prominent political figures. While investing in offshore tax havens can be done perfectly legally, there are also suggestions that—and you might want to sit down for this—some members of the global super-rich, including those who espouse the values of opportunity and transparency, might be involved in some dishonest dealings. The 2015 leak of the Panama Papers led to the downfall of prime ministers in Iceland and Pakistan, so who knows where this might end up.
Here's a rundown of revelations from the Paradise Papers so far.
Bono bought a Lithuanian shopping center
What kind of tax avoidance scandal would this be without a mention of Bono? The U2 frontman and self-styled humanitarian is reported to have used a company based in Malta—a country where foreign investors pay just five percent tax on company profits—to buy a stake in a Lithuanian shopping center. Rock 'n' roll.
The Queen invested in a sketchy rent-to-buy retailer
While the Queen was receiving taxpayers' money for the upkeep of Buckingham Palace, her private estate was investing in a fund which held shares in BrightHouse, a retailer which exploited society's poorest and most vulnerable by charging extortionate repayments on household appliances.
The Duchy of Lancaster, an investment portfolio set up to provide income for the Queen, has been revealed to have placed around $10 million in offshore funds in the Cayman Islands and Bermuda. Those funds owned shares in businesses including BrightHouse and Threshers, the high street off-license which went bust owing $17.5 million in tax.
Approached by the Guardian, the duchy said it had no idea about its investment in BrightHouse. It has been suggested that the Queen was badly advised—a claim that makes the case for an immediate 100 percent tax on all wealth that individuals are unable to keep track of themselves, starting with anyone being paid $82 million of public money every year on the basis that it's probably good for tourism.
Lord Ashcroft never gave up his "non-dom" status
Conservative party member Lord Ashcroft, has a long history of unusual tax arrangements. In 2010, it was reported that he had given up his "non-domicile" tax status to comply with a new law that required members of Parliament [MPs] and peers to be legally resident in the UK. According to the BBC, the Paradise Papers suggest Lord Ashcroft remained domiciled in Belize and "worked around the new law to continue avoiding tax on his worldwide income between 2010 and 2015."
Lord Ashcroft has donated millions of dollars to the Conservative party over the years, which makes this latest revelation a bit awkward for Theresa May, who has promised to crack down on both tax avoidance and offshore tax havens.
The BBC has released footage of a Panorama reporter questioning Lord Ashcroft about his tax affairs as he attempts to escape, while repeatedly muttering, "dear, dear, dear." Adopting a tactic pioneered by Ken Livingstone, he eventually disappears into a toilet. He later saw fit to tweet a joke about the encounter, rather than, say, groveling for forgiveness and offering to pay hundreds of millions of dollars to the royal treasury.
Donald Trump's advisers have yet more links to Russia
Donald Trump's commerce secretary Wilbur Ross is revealed to have business links with Vladimir Putin's son-in-law. According to the Guardian: "Ross holds a stake in a shipping company, Navigator, through a chain of offshore investments. Navigator operates a lucrative partnership with Sibur, a Russian gas company part-owned by Kirill Shamalov, the husband of Putin's daughter Katerina Tikhonova."
The Paradise Papers also reveal that two institutions funded by the Russian state invested hundreds of millions of dollars into Twitter and Facebook. The investments were made via vehicles controlled by Yuri Milner, a business associate of Jared Kushner, Trump's son-in-law and senior adviser.
Justin Trudeau's chief fundraiser has links to a Cayman Islands tax scheme
Canadian prime minister Justin Trudeau was elected on a platform of taxing the rich and has campaigned against tax havens. So it's unfortunate that Stephen Bronfman, the chief fundraiser for Trudeau's Liberal party, has been linked to an offshore trust in the Cayman Islands that Canadian public broadcaster CBC has speculated may have cost the country millions of dollars in tax revenue.
Offshore trusts are legal in Canada as long as management decisions are genuinely made in the offshore jurisdiction. The CBC says it has numerous examples of decisions that appear to have been made in Canada rather than the Cayman Islands. All of which leaves some pretty big questions to answer for a close associate of a politician who once declared: "Tax evasion is something we take very seriously."
Follow Mark Wilding on Twitter.